Pension regulator PFRDA has now enabled even individuals to work as distributor of pension products. Earlier only institutions were given the licences for distribution and the regulator had allowed entities such as banks, NBFCs and certain non-bank entities categorised as points-of-presence (PoP) to work as distributors.
“If we are to expand NPS in big way among retail segment then we thought individuals too must be allowed to distribute pension products. The individuals will be recruited as sub-entities .Whether these are insurance agents or mutual fund distributors, we will bring them also as our distributors,” Supratim Bandyopadhyay, Chairman, PFRDA, told BusinessLine .
Changes have been brought to the PoP regulations to enable this, he added.
Bandyopadhyay said that PFRDA will not give licences directly to individuals, but ask PoPs to allow them as sub-entities and monitor their functioning and behavioural part.
He said that PFRDA will roll out some broad guidelines under which the individuals can be recruited. PoPs will be directly responsible for the actions and inactions of the individuals (basically business correspondent or agents registered with them), he added.
Points-of-presence are basically the first points of interaction of the NPS subscriber with the NPS architecture. The authorised branches of a PoP, called Point of Presence Service Providers (PoP-SPS) will act as collection points and extend a number of customer services to NPS subscribers including requests for withdrawal from NPS.
Modifications
Meanwhile, modifications have been made to PoP, Central Record Agency and NPS Trust regulations so as to keep them in alignment with the proposed intent of separating the NPS Trust.
“Only those things that NPS Trust is supposed to do, that will find part of their regulations. Other things they are not supposed to do will come back to PFRDA. These changes have been made to bring certain things back to PFRDA. For instance in the case of PoPs a lot of things NPS Trust was doing. We found that they are not required.
NPS Trust will now only be looking after pension fund managers, Trustee Bank and Custodians. All the PoP related work of NPS Trust will now come to PFRDA supervision department”, he added.
It maybe recalled that Finance Minister Nirmala Sitharaman had in her 2020-21 Budget speech proposed the separation of the role of PFRDA from that of NPS Trust for government employees and announced that necessary amendment would be carried out in PFRDA Act for this purpose. Indications are that this Bill will be taken up at the upcoming monsoon session of Parliament.
PFRDA had also earlier indicated that it would in the coming days look at rationalisation of commission for PoPs on the lines effected for pension fund managers.